Accounting Practices and Subsidiary Books
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Questions and Answers

What is one benefit of having separate subsidiary books for different types of transactions?

  • It allows for random posting of transactions.
  • It eliminates the need for specialisation.
  • It makes it easier to locate individual items. (correct)
  • It combines all records into a single book.
  • How does the division of work among different personnel improve accounting practices?

  • It reduces the overall volume of transactions.
  • It allows for simultaneous work on various books. (correct)
  • It restricts individual accountability.
  • It encourages the use of a single journal for all transactions.
  • What is a key advantage of specialisation in accounting work?

  • It simplifies the overall accounting system.
  • It leads to a higher likelihood of errors.
  • It reduces the number of records that need to be kept.
  • It improves efficiency of the accounting processes. (correct)
  • What role do subsidiary books play in decision-making for management?

    <p>They allow for a detailed analysis of specific transactions.</p> Signup and view all the answers

    In what way do subsidiary books help in minimizing errors and fraud?

    <p>By enabling a division of responsibilities that facilitates internal checks.</p> Signup and view all the answers

    Which aspect of subsidiary books provides detailed transaction information?

    <p>They contain all aspects of a particular type of transaction in one place.</p> Signup and view all the answers

    How do subsidiary books facilitate efficient posting in accounting?

    <p>They organize similar transactions in one place for easy transfer.</p> Signup and view all the answers

    What is a disadvantage of maintaining only one journal for all transactions?

    <p>It makes it harder to locate specific transaction details.</p> Signup and view all the answers

    What is the purpose of an invoice in a business transaction?

    <p>To provide details of the goods sold to the buyer</p> Signup and view all the answers

    What is a trade discount?

    <p>A deduction from the list price for bulk purchases</p> Signup and view all the answers

    How is the net amount recorded in accounts after applying a trade discount?

    <p>The sale amount minus the trade discount is recorded</p> Signup and view all the answers

    What happens to trade discounts in accounting records?

    <p>They are not recorded in the books of accounts</p> Signup and view all the answers

    If an invoice indicates a total of $10,000 with a 10% trade discount, what amount should be recorded in the books?

    <p>$9,000</p> Signup and view all the answers

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